By Yameen Huq
You wouldn’t know Washington had a spending problem if you saw the defense bill. Despite a 9.1% inflation rate, the federal government continues to break records in military spending. The House recently passed an $839 billion defense bill that contains items the Pentagon didn’t even request. All this is happening while America’s allies in NATO shirk their basic duty: national security.
When the U.S. overspends and allies underspend, it leaves those allies vulnerable and misallocates military resources away from their best possible use. The Biden administration should hold a new NATO summit that leads to real burden-sharing by re-structuring the agreement as a “dominant-assurance” contract: a mechanism designed to secure commitment from free-riders.
High inflation means too much money chasing too few goods, usually due to excess spending. Yet somehow, defense spending is immune from re-examination. The bill increases spending $30 billion over the previous year and includes $37 billion for planes and ships the Pentagon didn’t request. Money spent on defense doesn’t go into the ether. It redirects the entire economy: labor, capital, and natural resources go towards building and maintaining equipment and personnel instead of domestic manufacturing.
When the U.S. spends, other countries slack. Since 2014, America’s allies have agreed to spend two percent of their GDP on defense. So far this year, only eight of 30 members are on track to meet the target. The U.S. itself constitutes 69 percent of defense spending within the alliance by itself. When one spends so much, it disrupts what ought to be a balanced relationship between partners.
This piece was originally published in The Orange County Register on August 26, 2022. Read more HERE.